Report touts explosive growth (and value) for energy efficiency programs

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By: SGN Staff

Energy efficiency programs aren't new. They have been around for 30 years or more in many states, since the energy crises of the 1970s. But according to a new report from the American Council for an Energy-Efficient Economy (ACEEE), energy efficiency programs have grown and developed to become "a low-cost, high-value energy resource for electric utilities and their customers."

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"Working with customers to reduce their energy use through improved energy efficiency was a radical departure from the traditional utility business model followed from the earliest days of the industry through the 1970s," said Dan York, ACEEE Utilities Program director and the report's lead author. "Using energy efficiency and related practices to manage customer energy use has become an integral and highly valuable utility energy resource."

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ACEEE explains that while some states have only recently started significant energy efficiency programs, the programs have overall grown rapidly, particularly in the past 10 years as the result of policies set by utility regulators and state policy makers. The report says the total budget for utility energy efficiency programs was $4.6 billion in 2010, four times larger than the $1.1 billion spent a decade ago.

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"The concept of energy efficiency as a utility resource is really very simple," noted Marty Kushler, ACEEE senior fellow and report co-author. "To keep an electric system in balance, you can either add supply resources or reduce customer demand. Utilities, regulators and policymakers have increasingly come to realize that it is far cheaper to reduce demand through energy efficiency programs than it is to construct, fuel and operate additional electric generating plants."

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And energy efficiency programs don't just cut costs. They have also shown substantial environmental benefits and can improve system reliability, the report says. Bottom line: ACEEE found that energy efficiency is the lowest cost energy resource available to utilities – by a wide margin.

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